PARIS – Total has signed a heads of agreement (HoA) with the National Iranian Oil Co. (NIOC) for development of Phase 11 of the South Pars field in the Persian Gulf.
The facilities will have a production capacity of 1.8 bcf/d, or 370,000 boe/d, with produced gas sent to Iran’s gas network.
Total will operate the SP11 project with a 50.1% interest with NIOC subsidiary Petropars (19.9%) and the Chinese state-owned oil and gas company CNPC (30%).
Patrick Pouyanné, Total’s chairman and CEO, said: “Following Total’s successful development of phases 2 and 3 of South Pars in the 2000s, the group is back to Iran to develop and produce another phase of this giant gas field.”
He described the company’s selection for this project as “a recognition of both our technical expertise and the partnership the group has built with Iran over the years. Total is pleased that the discussions with NIOC resulted in an attractive commercial framework.”
Under the terms of the HoA, NIOC and the project partners will conduct exclusive negotiations to finalize a 20-year contract in accordance with pre-determined technical and economic terms and within the framework of the Iranian Petroleum Contract recently approved by the Iranian parliament.
In parallel, Total will initiate engineering studies and a call for tender process so that construction contracts can be awarded following signature of the final agreement.
SP11 project will be developed in two phases. The first, with an estimated cost of around $2 billion, involves constructing 30 wells and two wellhead platforms connected to existing onshore treatment facilities via two subsea pipelines.
Offshore compression facilities will be added under a second, later investment phase, as required by reservoir conditions.
Managing Director of Pars Oil and Gas Co. Mohammad Meshkinfam estimated in-place reserves at Phase 11 at around 21 tcf, in an interview with news service Shana.